16-007552 John Ashmead vs. State Board Of Administration Status: Closed Recommended Order on Thursday, April 6, 2017.

Summary: Petitioner failed to demonstrate that he made a timely election to join the Florida Retirement System Investment Plan.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

JOHN ASHMEAD,

Petitioner,

vs. Case No. 16 - 7552

STATE BOARD OF ADMINISTRATION,

Respondent.

_______________________________/

RECOMMENDED ORDER

An administrative hearing was conducted in this case on

February 13, 2017, in Tallahassee, Florida, before James H.

Peterson , III, Administrative Law Judge with the Division of

Administrative Hearings .

APPEARANCES

For Petitioner: John Ashmead, pro se

408 S outh 15th Street

Fernandina Beach, Florida 32034

For Respondent: Brian A. Newman, Esquire

Pennington, P.A.

215 South Monroe Street, Second Floor

Tallahassee, Florida 32301

STATEMENT OF THE ISSUE

Whether Petitioner , John Ashmead (Petitioner or

Mr. Ashmead) , is entitled to change his Florida Retirement

System (FRS) election from the FRS Pension Plan to the FRS

Investment Plan.

PRELIMINARY STATEMENT

By letter dated November 18, 2016 (Denial Letter), the

State Board of Administration ( Respondent or the SBA ) , advised

Petitioner of its decision to deny Petitioner's request to

process a second election form to change his FRS election from

the FRS Pension Plan to the FRS Investme nt Plan. The Denial

Letter advised Petitioner of his right to request an

administrative hearing on the issue within 21 days. Petitioner

timely filed a petition for hearing , and , on December 21, 2016 ,

Respondent's counsel forwarded Petitioner's petition f or hearing

to the Division of Administrative Hearings for a hearing. The

case was assigned to the undersigned and subsequently scheduled

for the final hearing held February 13, 2017.

Petitioner attended the final hearing and was unrepresented

by counsel. Petitioner testified on his own behalf , but

presented no other witnesses. Petitioner's E xhibits P - 1 and P - 2

were admitted into evidence without objection. The SBA , through

the introduction of deposition transcripts, presented the

testimony of Respondent , Jennifer Lafave , and Sergeant Edmond

Israel . Respondent's Exhibits R - 1 through R - 4 and R - 7 through

R - 10 (which include the deposition transcripts of Respondent and

witnesses Lafave and Israel) were admitted into evidence without

objection.

The proceed ings were recorded and a transcript was ordered.

The parties were given the standard 10 days from the filing of

the transcript within which to file their respective proposed

recommended orders . The one - volume T ranscript of the hear ing

was filed on March 17, 2017 . Thereafter, Respondent timely

filed its Proposed Recommended Order , which has been considered

in the preparation of this Recommended Order. Petitioner did

not file a proposed recommended order.

FINDINGS OF FACT

1. Petitioner was employed by t he Florida Department of

Agriculture and Consumer Services (Department of Agriculture) ,

Office of Agricultural Law Enforcement, an FRS - participating

agency, beginning January 10, 2010.

2. Mr. Ashmead, through his employment with the Florida

Department of Agriculture and Consumer Services (Department of

Agriculture) , became a member of the FRS Pension Plan . The FRS

Pension Plan is a defined benefit retirement plan.

3. Because of health concerns, Mr. Ashmead made the

decision to retire from the Department of Agriculture in 2016.

Mr. Ashmead decided to move to the FRS Investment Plan before he

retired so he could take a lump sum withdrawal of his FRS

retirement assets, a plan feature not available to Pension Plan

members.

4. Mr. Ashmead completed a secon d election form that

indicated his desire to transfer to the Investment Plan and gave

it to Sergeant Edmond Israel (also employed by the Department of

A griculture) on October 6, 2016. Sergeant Israel agreed to

transmit the second election form to the Plan Choice

Administrator by facsimile (fax) to fa x number 1 - 888 - 310 - 5559

(as per the instructions on the second election form) for

Mr. Ashmead.

5. Sergeant Israel attempted to transmit the second

election form by fax to the Plan Choice Adm inistrator on

October 6, 2016. Sergeant Israel did not call or take any other

steps to confirm that the fa x transmissions he attempted to send

for Mr. Ashmead were received.

6. T he fax journal log for the fax machine that Sergeant

Israel used indicates that Sergeant Israel's attempted

transmissions of Petitioner's second election form to fax number

1 - 888 - 310 - 5559 on October 6, 2016 , were not completed. The

transmission results were "busy" which means "busy" or "no

response" per the fax journal log legend. In fact, all the

attempted transmissions from the same fax machine that Sergeant

Israel used are marked "busy" from July 17 , 2016 , through

October 16, 2016, indicating that the fax machine that Sergeant

Israel used was not functioning properly.

7. AON He witt, the Plan Choice Administrator for the FRS

Investment Plan, did not receive the second election form

Sergeant Israel attempted to fax for Mr. Ashmead on October 6,

2016.

8. Mr. Ashmead submitted hi s resignation letter on

October 6, 2016 , and stopped working for the Department of

Agriculture altogether on October 20, 2016.

9. Mr. Ashmead called the " MyFRS Financial Guidance Line "

on October 21, 2016 (after he terminated employment with the

Department of Agriculture) to inquire about his second election

status. He was told during this call that the Plan Choice

Administrator had not received his second election form .

10. On October 26, 2016, for the first time, AON Hewitt

received a second election form that was signe d by Mr. Ashmead

ind icating Petitioner's desire to transfer to the Investment

Plan.

CONCLUSIONS OF LAW

11. The Division of Administrative Hearings has

jurisdiction over the parties and subject matter of this

proceeding. See § § 120.569 and 120.57(1), Fla. Stat. 1/

12. Petitioner, as the party asserting the affirmative in

this proceeding, has the burden of proof. See, e.g. , Balino v.

DepÓt of HRS , 348 So. 2d 349 (Fla. 1st DCA 1977); see also Wilson

v. Dep Ó t of Admin., Div. of Ret. , 538 So. 2d 139, 142 (Fla. 4th

DCA 1989)(burden is on beneficiary to establish entitlement to

retirement benefits ).

13. A s the usual standard of proof applicable to questions

of fact in administrative hearings, the standard of proof which

Petitioner must meet in this case is a preponderanc e of the

evidence. See § 120.57 (1)(j), Fla. Stat.; Haines v. DepÓt of

Child. & Fam s . , 983 So. 2d 602 ( Fla. 5th DCA 2008).

14. Movement between FRS plans after an i nitial election

has been made Ï - the "sec ond election" or "2nd election" - Ï is

governed by section 121.4501(4)(e), Florida Statutes , which

states:

(e) After the period during which an

eligible employee had the choice to elect

the pension plan or the investment plan, or

the month following the receipt of the

eligible employee's plan election, if

sooner, the employee shall have one

opportunity, at the empl oyee's discretion,

to choose to move from the pension plan to

the investment plan or from the investment

plan to the pension plan. Eligible

employees may elect to move between plans

only if they are earning service credit in

an employer - employee relations hip consistent

with the requirements under

s. 121.021(17)(b), excluding leaves of

absence without pay.

§ 121.4501(4)(e ), Fla. Stat. ( emphasis added).

15. A member is eligible to change plans only if he is

earning service credit in an employer - employee relationship;

that is, still employed. The law does not allow FRS members,

like Mr. Ashmead, to change plans after they terminate FRS -

covered employment.

16. The process for making a second election is set forth

in Florida Administrative Code Rule 19 - 11.007 . This rule places

the burden on the member to ensure the second election form is

timely received by the Plan Choice Administrator stating: "[i]t

is t he responsibility of the member to assure that the 2nd

election is received by the Plan Choice Administrator no later

than 4:00 p.m. Eastern Time on the last business day the member

is earning salary and earning service credit."

17. Thus, to change retire ment plans in accordance with the

foregoing statute and rule, it was Mr. Ashmead's responsibility

to ensure the Plan Choice Administrator actually received his

second election form before he terminated FRS - covered

employment. See also Pazian v. Fl a . Prepaid Coll. B d . , Case

No. 09 - 3367 ( Fla. DOAH March 9, 2010; Fla. Prepaid Coll. Bd.

June 2, 2010)(holding that the transmitter of certain investment

instructions via fa x assumed the responsibility to ensure the

instructions were actually received by the intended recipient).

18. The fact that Mr. Ashmead made the decision to change

plans before he retired is immaterial. Likewise, the fact that

Mr. Ashmead delivered his second election form to a co worker,

Sergeant Israel, before he retired is of no conse quence. FRS

employers are not agents of the SBA. As such, the SBA is not

bound by information communicated to FRS employees and is not

responsible for their failure to complete activities required by

law to change plans. See § 121.021(10), Fla. Stat.; see also

Serpas v. State B d . of Admin. , Case No. 12 - 3250 ( Fla. DOAH

Jan. 1, 2013; SBA Feb. 20, 2013)(holding that an FRS member's

second election was invalid even though his co worker attempted

to fax his second election form before he terminated FRS - covere d

employment).

1 9 . Having failed to meet his burden to demonstrate that he

made a timely election to join the FRS Investment Plan,

Mr. Ashmead's request for relief must be denied.

RECOMMENDATION

Based upon the foregoing Findings of F act and Conclusions

of L aw it is:

RECOMMENDED that the State Board of A dministration issue a

final order denying the relief requested in the petition filed

by John Ashmead.

DONE AND ENT ERED this 6th day of April , 201 7 , in

Tallahassee, Leon County, Florida.

S

JAMES H. PETERSON, III

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Divis ion of Administrative Hearings

this 6th day April , 2017 .

END NOTE

1/ Unless otherwise indicated, all references to the Florida

Statutes or Florida Administrative Code are to current version s .

COPIES FURNISHED :

John Ashmead

408 South 15th Street

Fernandina Beach, Florida 32034

Brian A. Newman, Esquire

Pennington, P.A.

215 South Monroe Street, Second Floor

Tallahassee, Florida 32301

(eServed)

Ash Williams, Executive Director

and Chief Investment Officer

State Board of Administration

1801 Hermitage Boulevard, Suite 100

Post Office Box 13300

Tallahassee, Florida 32317 - 3300

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.